Smiths News

Overview
Price performance
Financials
Research
Thematics

Smiths News is the UK’s largest newspaper and magazine distributor with a c 55% market share covering 24,000 retailers in England and Wales. It has a range of long-term exclusive distribution contracts with major publishers, supplying a mix of supermarkets and independent retailers.

Volumes of newspaper and magazine sales have been falling at an average rate of c 5% pa for many years as first TV and radio and then online have taken over as the primary source of news consumption by an increasingly younger audience. Cover price inflation has partially offset lost revenue, but Smiths News has had to, and continues to, cut costs repeatedly to make up the shortfall. These characteristics are likely to persist into the future, but Smiths is developing new revenue streams to offset these pressures.

Latest Insights

Industrials |
Update

20.05.24

Smiths News — Refinancing releases dividend shackles

Industrials |
Flash note

31.01.24

Smiths News — On track to meet guidance

Industrials |
Update

20.11.23

Smiths News — Expansion initiatives begin to blossom

Industrials |
Flash note

04.10.23

Smiths News — Resilient performance despite headwinds

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Sector

Industrials

Equity Analyst

Andy Murphy

Director, Financials & Industrials

Key Management

David Blackwood

Chairman
George Cooper

Head of corporate and finance
Jonathan Bunting

CEO
Paul Baker

CFO

Balance Sheet

Forecast net debt (£m)

12.1

Forecast gearing ratio (%)

170

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	6.4	18.0	36.5
Relative	5.6	12.5	23.3
52 week high/low	65.6p/40.7p

Financials

Smith News’ H124 results highlighted the robustness of the underlying business, but also revealed the success that management is achieving in creating long-term shareholder value. For example, 74% of revenue is now contracted until 2029, the recent refinancing saves costs and removes the dividend restriction, and the organic growth initiatives are gaining significant momentum. Furthermore, the revised capital allocation policy raises the possibility that modest, self-funded M&A could add further scope to the growth initiatives. Our revenue and profit forecasts are broadly unchanged, but dividends are materially raised. Our valuation is edged up to 90p.